The lean 0.2% Q2 U.S. ECI rise marked a new cycle-low gain The lean 0.2% Q2 U.S. ECI rise marked a new cycle-low gain that sharply diminished the cyclical uptrend in labor cost growth from late-2009 recession-lows. The tiny rise follows 0.5%-0.7% gains over the prior four quarters that outpaced the 0.4%-0.5% ECI gains in each of the nine quarters ending back in Q4 of 2013. Recent gains were unrevised, at 0.7% in Q1, 0.5% in Q4, 0.7% in Q2 and Q3, and a prior cycle-low 0.3% in Q1 of last year. ECI weakness in Q2 was skewed toward benefits but was evident in both the wage and benefit components. The cycle-low 0.2% wage gain sharply curtailed the steep four-quarter climb in wage growth through Q1 that seemed at odds with the assumption of continued labor market slack, while a tiny 0.1% cycle-low Q2 benefit cost rise reversed the upward tilt that appeared to be emerging after the 1.1% spike in Q2 of last year. Benefit costs climbed sharply back in 2010-11, but then moderated over the 2012-2013 period, and the upward tilt since then is now quite modest.

08:55 EDT

U.S. equities recovered some lost ground U.S. equities recovered some lost ground despite a lackluster session overnight on global bourses amid fresh declines in commodity prices and oil, with mostly second-tier data on tap. But Q2 ECI was very muted on all counts and alone certainly won't provoke the Fed into any rushed move on rates, which allowed stocks to bubble back up from negative territory. Ahead of the opening bell the Dow is still 12-points lower, but S&P is up 2-points and NASDAQ is 6-points higher. This followed a muted session in Asia, with China's Shenzhen fractionally higher, the Shanghai Comp 1.13% lower and the Nikkei 225 up 0.3%, while over in Europe the Euro Stoxx 50 is 0.2% lower and the German DAX is flat. In earnings news, Exxon posted its lowest profit since 2009 as net income was cut in half to $4.19 B from $8.78 B in a big miss, while CEO Tillerson predicted that oversupply and depressed prices will remain in place for a couple more years. Chevron missed by a big margin as well, as did LinkedIn after costs relating to its Lynda.com merger, falling 6%. Expedia ralled 8% after a beat.

08:50 EDT

FX Action: USD-CAD knee-jerked higher FX Action: USD-CAD knee-jerked higher on the Canada GDP miss, though with the market generally seen as well long going into the data, profit taking immediately stepped in. The pairing bounced to 1.3099 highs from 1.3045, before falling to 1.2995 lows. The rebound in oil and gold prices after the weaker U.S. ECI data, and the subsequent fall in the greenback more broadly, has also been CAD positive.

FX Action: USD-CAD firmed up over 1.3060 FX Action: USD-CAD firmed up over 1.3060 into the open, supported by another session of commodity weakness overnight. WTI crude fell back under $47.50, as gold prices approach the 5-plus year lows seen last week, basing at $1.070.30. Copper prices meanwhile, are within a hair of their six-year low, trading under $2.36/lb. The 8:30 EDT release of Canada May GDP data has brought some USD-CAD buying to bear as well, with many looking for a sub-forecast outcome. Further growth deterioration will increase the odds of another BoC rate cut.